♪ imus in the morning ♪ >> attention, stock holders, there is a tax revolt brewing and you are going to win. good morning, everyone. tens of billions of dollars in extra dividend payments have been announced and the money will be paid this year, so, you avoid the expected dividend tax increase next year, that's a tax revolt sticking it to the president and the treasury. and here is a forecast that "varney & company" got right. the obama team wants to raise

tax now, promises of entitlement reform later and ignore the debt. that's the fiscal cliff deal of the day and the market likes it and the numbers are 5, 16, 22, 23, 29, and the powerball is 6. you lost. the government won. "varney & company" is about to begin. [ male announcer ] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the marke he goes with people he trusts, .

. >> . stuart: it's a modern day tea party. it's a revolt led by corporations. the wall street journal reports 173 companies announced they'll pay special dividends for shareholders before the end of the year because a big tax increase on dividends could be coming next year and many companies moving up regular dividends to save their taxpayers, to save taxpayers a lot of money. start with disney. it's raising its dividend and paying it out on december 28th. that's 1.3 billion dollars paid out in total, paid out under the

current tax rate. and las vegas sands paying a special dividend, that's a one on shot. 2 and 1/4 billion total. half of that will go to sheldon adelson. costco 3 billion, special dividend, it's borrowing some of the money to pay it and paying it this year until next and that could save shareholders in that one area, 700 million dollars in taxes. and check this out, please. moving on swiftly, a brawl between the nets, and celtics. and rondo and kris humphries who you may remember for beiig married to kim kardashian, all of two months and eventually, the teammates got involved and became a big scuffle. and if you look closely, humphreys pulling rondo's jersey over his head so he can't see. millionaires all of them, tax em. but that was nothing compared to the fight on the o'reilly factor last night. owes, no, wait for it, bill o'reilly got into it with david

silverman, president of the american atheists, and discussing atheists objection, to christmas displays at buildings. look at this. >> if you wanted to go to go up to albany new york and have a happy winter stoolstice sign on governor cuomo's door. >> i wouldn't, don't tell me what i think, if i don't have a problem, i don't have a problem. >> it got much rougher than that and we'll play more of it and discuss it on this hour of "varney & company" now. this, forbes says 11 states are in a death spiral we brought you the story yesterday, it's all about makers, versus takers, billions in debt no end in sight and then we have detroit on the verge of being dissolved as a city and we have the foremost with state finances with us and of course, we will bring you the opening bell next. [ male announcer ] if you're eligible for medicare,

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>> we are expecting the dow jones industrial average to go up at the opening bell, maybe 50 or 60 points higher. i've got two numbers from the government, pre-market release, number one, in the third quarter, the u.s. economy expanded at an annual rate of 2.7%. and that's better than the original 2% even that was reported a couple of weeks ago

and last week, there were 393,000 new claims for jobless benefits and down from the previous week, but you're still very close to the 400,000 per week mark and that's a sign of weakness, albeit, come of that clearly from the storm, that's still not a healthy vigorous rebound, is it? trading has begun this thursday morning. we're expecting the dow to go up 50, 60 points and that's in part because of the fiscal cliff debate and looks like the president won taxes now, promises of entitlement reform later and don't care about the debt. the market kind of likes that, because the money keeps flowing. in the first part of business, we're flat, i thought more than that, we're up 2, 10 points and going up from here, at least in the early going. now, we've got another big name that you know #, trying to help shareholders avoid higher taxes next year, it's disney and increased the cash dividend by

25% and paying it this year. nicole, what happens to disney stock now. >> and it's an up arrow here shall the dow jones industrials up. and disney was a winner, slightly to the upside and joins over a hundred companies, accelerating it and raising it by 25% and good news there for disney, i'm surprised it's not up a bit more because of the the early payout and i want to move on to tiffany. i'm not going to call this a democratic luxury outfit. i call coach democratic luxury, and tiffany, i think, is pure luxury, but, i think they lowered their sales forecast, didn't they? i expect it's down. >> i think you're right. i think it really is extreme luxury when you think about tiffany. it is for the down side. down significantly down about 8%, but to your point, it has winter sales and revenue and earnings per share, asia was weak, but the one piece that really is affordable, which is silver jewelry, that's the one element in the big blue box

there that you can afford and even the silver jewelry is where they saw that diminish as well so that shows you that even the buyers who used to like to try and step into tiffany and buy something that was affordable are not doing so. >> it's funny that you should say that, because if you go to the big tiffany store, fifth avenue in new york city and go up to the third floor, that's the silver floor. that's the floor that i know very well, because it is a little cheaper. all right. so, we're done with this? thank you, nicole. the dow jones industrial average in the first minutes is up 42 points. i can remember margaret thatcher argument the simple point, the trouble with socialism is that sooner or later you run out of other people's money and she was right. which brings me to today's news story. a new report in the london telegraph shows that nearly two-thirds of millionaires left britain to avoid paying a country 50% tax rates. and british conservatives argue that the increase in the higher

tax rate led to a loss in government revenue and they say 7 billion pounds was lost. the chance exchecker, george oswald announced the top tax rate will be reduced in april. the point here is that people with money are noble, they walk away from higher taxes and talk about people fleeing the country. one forbes article suggests that we shouldn't even invest in certain states here in our own country. 11 states are in what forbes is calling a financial death spiral. and william baldwin, he wrote the report and he says the states on the green leave more takers than makers, and he suggests that we should not invest in the states and shouldn't buy their bonds and don't buy a house there, rent instead. and steven is with the manhattan institute. don't buy a house there, don't invest in their bonds, what's

steve mar langea say about that. >> and let's take the part first, politicians in the states themselves said this, rahm emanuel said this year, if we don't fix our pension problems you're not going to get a family to buy a house in chicago and not going to get a company to invest in chicago, why? remember what milt freeman said about government debt, nothing more than taxes that haven't been collected. people understand that now and see that in particularly local communities where most, most pension funds are funded with property taxes and they know property taxes are going up and in massachusetts the massachusetts taxpayer association did a study calculating how much property taxes have to go up in 50 communities, in order to pay for retirement benefits. and it's clearly something that is going to influence taxes down the road. >> the new york time's lead story yesterday, front page, lead story, things are looking up in california have a surplus in a couple of years because

they've raised taxes, what do you make of that? >> well. stuart: california is one of the states. >> california is a very, very mixed bag right now, because their economy is looking somewhat better, but relative to terrible. they had 13% unemployment just a little while ago. at the same time, however, they're doing this, by raising taxes and they have one of the worst out-migration problems in the country. stuart: will it work, will it give them a surplus? >> well, a short-term surplus doesn't help if it does long-term damage to your economy. right now, they are losing jobs to other states, and we've calculated, the manhattan did the study on jobs and migration and the number one place that california jobs are leaving and going to is texas and that tells us something, it's not an illusion, these are actual numbers. stuart: so, do you agree with the characterization of death spiral? and that's obviously dramatic stuff. >> right, right, one of the things. stuart: would you go that far? >> no, i wouldn't go that far,

one of the reasons because the states have a lot of latitude, including the latitude to keep doing things like kicking the can down the road and the problem and the reason why you can't predict when it all ends. the way it ended for new york city in the 70's, suddenly, bondholders stand up and say, we can't take this, but it happened just like that. >> that's what i always wanted to know. what is the end game? you can kick the can, kick the can and you can keep on doing that and suddenly, when you wake up and you can't, and it just happens like that and that's a risk that these states take, so, that's the end game, the lenders say, no mas. you've had enough. you're not going to repay us-- >> and the alternate to the end games for the states, we get an unexpectedly robust american recovery in the next ten years in the markets and in the economy. >> you've got it it wrong. >> and it bails them out. >> you're right. >> i'm just saying, saying that's an alternate scenario. >> you, sir, are-- i'll give you the alternate scenario, and i knew you were

going to say that. >> of course. >> right now there's not an appetite for that in washington. >> who cares? >> and a second term. >> and you have a republican, and you do have the republican house which would step in the way of that. >> administration action and california voted for president obama for a second, by 20 points, and you don't think some reward is due? and hold on one second, steve, i'm going to do a news story and i want your comment. >> okay. steve? >> first of all, detroit is looking at many different options and one of the options is the mayor himself, dave bing, has suggested is shrinking the city. in other words, there are too many people, 750,000 people,

there are vast tracts of detroit that they can't cover any more that they're the not using and they want to close it down, stop providing services and that's what dave bing is suggesting it's clear that some of these big former american cities are not going to come back and detroit's never going to be 2 million people again. so you need some kind of alternative. whether you break the city up into, you know, taking apart into smaller communities or simply shut down parts of the city. stuart: this is bankruptcy and-- >> they're insolvent, an insolvent city so they have to do something like this. and that westbound considered a giant corporation restructuring or a corporation that doesn't, it can't make it right now. stuart: a key question, if they declare bankruptcy, that's the option they choose, bankruptcy, do they have to pay the cops and firefighters and everybody else their pensions? >> that's up to the courts. because of course, they will argue in cases, depends on michigan law, depends on the michigan constitution and how it's interpreted. stuart: and it would go to the states. if the court says you've got to pay then the state has to pay as opposed to the city, right? >> well, if they're insolvent,

you know, raise taxes you're right. stuart: on who. >> very good. [laughter] >> they're done for, i suspect. steve, thank you very much, sir. speaking of putting all options on the table, new at 10. the mortgage interest deduction could be cut or certainly limited as part of a fiscal cliff deal. it's on the table. okay? we're talking about that coming up at the top of the hour, one of our new at 10 stories. all right, back to nicole, research in motion, all right, all over the place these days, but today they're up and i want to know why. >> a buy rating for goldman sachs equals up arrow and this is as simple as wall street gets. you've got positive comments right now on blackberry, for research in motion and the blackberry 10 coming out on january 30th, goldman sachs is saying that the first time in three years the street's estimates are just too low for forth coming device and the risk rewards looks really good here

and it depends if this device is a good one and that's why you see, and the price target, they have a new price target, stuart, $16 up from $9 and they see upside potential. stuart: we'll see, and i have your seven early movers for you, the women's apparel maker cold water creek took in more than expected and that stock is up. oh, 11%. disappointing profits from lazy boy and semtech is up big. and aeropostale on the holiday season, it's down. and the tech company info blocks, raised outlook and always good news. up 29%. and a medical equipment maker pall p-a-l-l and nci, the cash

register people, agreed to buy the software maker retalix. unchanged. and two winning tickets in the huge powerball drawing last night. instant millionaires created and what should the lucky people do next? well, we have a recent lottery wink joining us after the break. has he been smart with his money and how much did the government take away from his winnings? that's next. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know.

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>> as expected modest rally in the early going. the dow retains 13,000, and check the price of oil. where are we?

i think it's a solid gain, up two bucks back up to $88 per barrel and two winners split last night's powerball jackpot 580 million dollars, but after the lump sum value and taxes are, each ticket is worth about 120 million, both of them. earlier this month our next guest won a million dollars in the new york state lottery and he joins us now, he's in the studio with me here in new york, his name is david doyle. welcome, david. >> thank you. stuart: you won a million. yes. stuart: how big was the check you got. >> 661,800. stuart: now, you have to declare 661,800 dollars by april 15th of next year. >> yes. stuart: you're going to have to pay a lot and how much? >> yeah, it's about, the government will get about 550 outs of the million. stuart: so you'll get about 450, is that fed and state. >> yes. stuart: you get 450 out of a

million? >> good, great. stuart: what? >> what many i-- >> you don't mind, what am i going to do, that's the law. i'm happy, i'm happy. stuart: wait a minute, what was it when you figured out i just won a million bucks? >> i was sitting in my truck with my little dog and scratched it off and i knew right away i won a million. and i said, it was relief. >> you talked to the dog? >> i do talk to the dog. the dog's never talked to me, but-- >> what was the first thing you bought? >> oh you've got to ask that. stuart: i have to ask. >> my little grandson, four-year-old, shauny, he comes over and he stays overnight and whenever he goes to the toilet he slams the toilet seat down. stuart: yes. >> and i went out and bought a toilet set that you push it and it goes down by itself.

stuart: you've got to be kidding me, you win a million bucks and the first thing you buy is a toilet seat. >> and we're not going to change much. five children, seven grandchildren and they're all going to get something. stuart: have you got a financial planner? >> i interviewed six or seven so far. stuart: what are they telling you to do? you're going to splash a little bit. >> you know, this is all new to me, financial planning stuff. so, i'm being kind of bombarded from all sides. a couple of guys i like. stuart: yeah. >> and i've got to pick somebody out personality-wise and hope he does good for me. stuart: you're going to exclude some people. >> if you want to do it, i'm-- >> have you got relatives crawling out of the woodwork. >> i've he had two people come out like that. stuart: how easy was it to say get lost. >> for me, no problem, no problem. stuart: do you have a big purchase in mind? >> not really.

stuart: not a new truck? >> maybe a new car. stuart: yes? >> we have a truck that's got 170-some thousands miles on it and i kind of like that truck and our car's got over 100, so, i don't know, one of them. stuart: you won-- you're sitting in your truck with your dog. >> with the dog. stuart: scratched it off and sarah is the name of the dog. >> you'd like her, too, corgi. stuart: oh, the queen's dog, very good. and you were sitting there and this was three weeks ago, how do you feel now, three weeks of just floating on air? >> yeah, pretty much. i'm very relieved. i mean, i took this-- they gave me a big check the new york state lottery and i have it hanging up in our living room and every time i walk past it i look at it it's relief because i'm not in the best of health and i've had open heart surgery

and blah blah blah and worried about getting older with medicine and now, i'm feeling-- >> so you've got some degree of financial peace of mind. >> yes. stuart: the bills that come in the mail, david doyle can take care of them. within reason. >> right. stuart: david, it was great to have you with us today. absolute congratulations. >> thank you. stuart: you, sarah and all of those relatives. great to have you with us, sir. >> thank you. stuart: thank you very much indeed. time for the gold report. 9:50. here we go, what have we got. 1,727 per ounce. up this morning. you know it's the holiday season when atheists are arguing about christmas displays and last night on the o'reilly factor, bill o'reilly laid into an outspoken atheist and got heated, really. and carol roth and charles payne are here and more on the atheists. ♪

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>> oh, there was very little christmas cheer on the set of the o'reilly factor last night and bill o'reilly got into it with the head of the american atheists whether christmas should be be a federal holiday. >> if you wanted to go down to

albany, up to albany, new york, and put up a happy winter stole sis sign on andrew cuomo's office door. >> i think you would. >> don't tell me what i think. when i said i didn't have a problem, i don't have a problem. stuart: and it got heated and did actually get much more heated than that. but charles you've got a thing about atheists. charles: i really do. i believe that atheists have a tremendous wind in their sales and key positioning and strength in the media and influence in the white house and there's a full frontal attack on one of the foundations, key foundations of what made us great and that's belief in god. it doesn't matter necessarily religion, but a belief in god and they're brilliant because what they try to do is pit different religions against each other, no nativity scene because you're offending the muslim and-- >> carol roth? >> i don't see this as a religious issue and i'm jewish and can speak on the issue, i

love the christmas holiday, what are you going to do take santa out of the mall? as americans we embrace the season as a season of cheer and that the atheists here should-- first of all, if they took it away they'd be so sad, they'd have nothing to argue against. stuart: and what i object to one atheist objects and everybody has to accommodate them. tough. and president obama is sending the treasury secretary to argue about the fiscal cliff. and we talk to a reasonable democrat, why the president doesn't just lead. plus, a major incentive to buying the house, the mortgage interest deduction, it costs the federal government a lot of money, that deduction is on the table in those talks, got it? next.

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i heard you guys can ship ground for less than the ups store. that's right. i've learned the ly way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiy stress. save on ground shipping at fedex office. stuart: one of the biggest incentive to buying a home, mortgage interest deduction. it is on the table in the fiscal cliff tops. that deduction costs the federal government $100 billion a year, limiting the deduction is being considered. also, who's talking to congressional leaders about the fiscal cliff? tim geithner. obama goes on the road, look at

that video. tim geithner arriving at the white house. capitol hill, dow industrials up 63 points in the early going this there's a morning. recovering investment banker carol roth is here, charles payne is here and nicole petallides on the floor. she looks really angry, on the floor of the stock exchange. new at 10:00, is the mortgage deduction on the table in the fiscal cliff talks, the answer is yes. >> at this point everything is on the table. the challenges you have to question where the limit is. do we want people to the grandfathered in, you don't want anyone to get a new mortgage, we have ridiculously low interest rates, stocks in terms of prices, we don't need it to the grandfathered and the table for

the future. stuart: i don't believe anyone is saying abolish the mortgage interest deduction. and a certain amount year is what they were saying. and the interest on it is -- they lower that. charles: there are some people that are derivative. stuart: there is no prayer of that. the details of paul ryan's plan have something to the degree. and during the debate, they had a lot on it, a lot of the concessions. >> you have to grandfather the middle class at a minimum. you don't need it on a go forward basis, the reason to have more mortgage interest deduction to start with is the interest rates in this country, and --

stuart: i agree with you. the grandfather concept, and have a mortgage. and can i suddenly not deduct the mortgage i had 25 years? >> a horrible thing for you. stuart: are we agreed on this? [talking over each other] charles: something is going to happen that people don't like. will be very unpopular with a bunch of people. they will pay higher taxes. stuart: treasury secretary tim geithner, on capitol hill, the fiscal cliff. isn't this what president obama should be doing? going on a pant decamping trail, and the tax the rich plan. he won the election. who else does he need to convince? doug shoen still a democrat.

why is this, why is tim geithner talking to congressional leaders, politicians? >> we are not close to a deal yet and the president will come in at that point. the president has shown no inclination, no facility or ability to negotiate deals. bottom line with the terms of the deal still as you were saying, sketchy, not taking the risk of bringing the president in. stuart: here's what i think i am going to like. i think the president will insist on tax increases on a ridge weathered is lower deductions and tax rates, more tax from the ridge. and the delay of any entitlement reform or spending cuts, promise them get to later.

but ignore the debt. >> some compromise on higher rates, and a framework for limiting the entitlements and doing entitlement reform but not specificity, but then they stuart: we have done this before. ronald reagan cut tax rates and congress promised to cut spending to reduce the deficit. spending cuts never happened. >> on the republican side it takes their negotiating power off the table. if a at the entitlement cuts of front. and taking that down the road. stuart: down payment satisfying -- >> and the president has said many time lost the election. stuart: charles last night said this about what leverage the

republicans have. the leveraged is if we go over the cliff no matter who is blamed will ruin president obama's second term because this economy really will go into recession. and we will get a debt downgrade. that would really hurt -- >> there's a more serious which is any dissertation of our military. we are still one nation under god and we do not need to make imprudent cuts in defense for the sake of political gain or tactical benefits. i am against it and -- charles: you didn't answer the question. i still think the public will blame republicans. >> absolutely right. stuart: republicans don't have a lot of leverage. [talking over each other] >> their leverage goes back to their core beliefs and this is where the game of politics you have to draw a line in the sand and whoever is representing

republicans were elected by citizens. they lost the presidency -- here is the bottom line. they go to their core principles and say we did not win public relations but can we save the country? i hope they do that. stuart: do we get a deal of any kind? >> if we get a deal the type you are describing will be inadequate. we will have a slowdown next year. erskine bowles said we will probably go over the cliff and have a recession. stuart: any deal the market goes up. that is my opinion. >> short-term. but longer-term i am worried. stuart: always a pleasure. thank you very much. i want to go back to nicole petallides because i have the stock price of kohl's way down and i want to know why. nicole: a little bit of good news and mostly bad news. the bad news is in november, the cops are terrible, expectations moved to the upside over 1%. same-store sales were down over

5%. kohl's is blaming hurricane sandy. maybe -- i can't wait to hear the retailers and how much did hurricane sandy affect business? the one good piece of news is the thanksgiving weekend shopping was good and encouraging. stuart: hold on a second. as soon as you said kohl's is blaming hurricane sandy charles purcell with laughter. charles: it is a disingenuous -- i wish these companies would come clean at least internally. coles has been in trouble. they were a star a decade ago and have not kept the magic going. who goes to cold anymore? go to wal-mart or target. nicole: if you are stuart varney the to the third floor of tiffany. stuart: good one. kohl's is down. thank you very much. the fbi processes 150,000 background checks for gun purchases just on black friday

alone. gun sales clearly booming. worried that president obama will take away their second amendment rights. do you remember this? >> you will see a siege on the second amendment we have never seen before. president obama is trying to camouflage this issue, fog this issue to get through the election. sending 5 all over the heartland of the country, obama is not going to take your guns. they have been trying to fog the issue to get through the election but if they do, it is katie, bar the door. stuart: that man is back, and are a executive vice president joins us at 10:45 this morning and i will ask him what exactly is an assault weapon? 10:45, here we go. general motors has unveiled its own electric minicar and they unveil the that the l a auto show. it is the chevy stock. it comes just as california rolls out new mandates for automakers requiring them to sell electric cars. joining us now is carl bauer,

total care scourge executive officer and editor-in-chief. i have been down on electric cars to say the least even though i was considering buying a chevy volt. but you saying the spark is a big hit and is selling very well at least in los angeles. is that correct? >> the spark was shown at the l a auto show. but the league has been known for a while and this is doing better and better, seems to slowly being creasing sales and even the chevy volt also, there has been some help with incentives on both of them to cut lease rates but there has also been a ramp up of these quick chargers in los angeles. what we are seeing is a lot of the arguments about electric cars, they cost too much and you have ranged anxiety, being impacted and reduced because the cost is going down and these quick chargers where you get 85%

of the charger in 25 minutes is reducing the range. stuart: what i can't get over is the need for a massive subsidy. they will sell the spark for $25,000 but that is only if you get $7,500 worth of tax credits from the government. how do you feel about massive subsidies for electric cars? >> unfortunately, that is the name of the game. a few brick walls we need to break through, elector cars will never work and the 100 mile range limit is one i would like to see and the other is this 35, $33,000 price team and $7,000 to make it more like a compact car price. we need to address both of those. stuart: when you want all subsidies? >> no. we need to break through the ability to produce a car that doesn't need a $7,000 lump the cost $25,000. sergio marchionne at chrysler and fiat admits he is losing

$10,000 apiece on the 500 -- stuart: hold on. i have charles with me with a question. charles: general motors making the gigantic mistake so focused on this technology that the public is rejecting while toyota continues to dominate the hybrid market which is extraordinarily profitable and coming out with a better models and taking more market share recently. >> gm wants to show they can play this game because automakers have jumped in here and there's a certain level of ground base level of interest in the electric cars and so if you aren't in there at some level, there's a question -- [talking over each other] stuart: they are not selling. i want to buy a 50 mile per gallon small car that runs on gasoline. that thing works. >> you want it for $12,000 too. stuart: i can get it for

$20,000, can die? >> you can. the death of the conventional internal combustion engine has been greatly exaggerated. pulling more efficiency, ford has a one liter, 3 cylinder engine they are going to put in the fiesta and it is a one liter engine, 3 cylinders, it is powerful and fun to drive and it is going to get 40 mpg, so every time they get the electric car better the conventional internal combustion engine gets better and keep getting cheaper so this is the battle it will be hard to win for the electric car. stuart: thanks very much, good stuff. you have a comment? >> don't we have a double subsidy? taxpayers' bailout gm and now we are subsidizing the electric car as well. how much of the taxpayer dollars is going to create this electric car and is now the best time to do that? stuart: the chevy spark is from general motors just like the chevy volt, subsidize both of them. call it a tax revolt. more than 170 companies issuing

special dividends to avoid higher taxes next year. is a victory for investors but it is it also a victory for libertarians? we will ask one of them after the break. the judge. want to try to crack it? yeah, that's the way to do it! now we need a little bit more... [ male announcer ] at humana, we understand the value of quality time and personal attention. which is why we are proud to partner with health care professionals who understand the difrence that quality time with our members can make... that's a very nice cake! ohh! [ giggles ] [ male announcer ] humana thanks the physicians, nurses, hospitals, pharmacists and other health professionals who helped us achieve the highest average star rating among national medicare companies... and become the first and only

national medicare advantage company to achieve a 5-star rating for a medicare plan... your efforts result in the quality of care and service we're able to provide... which means better health outcomes... and more quality time to share with the ones who matter most. i love you, grandma! [ male announcer ] humana. ♪ stuart: the dow jones industrial average is up but only just, nowhere near as high as we were earlier, the dow was up 39 on top of a 100.9 gain yesterday.

some say there may be a deal coming on the fiscal clip. john boehner hinted at a compromise yesterday during our program, 24 hours ago stocks have gone up since then but now we are up 38. we are seeing a big jump in the price of oil today, above one dollar and $0.72 reaching $80 a barrel. gold is up $17.26 per ounce. stein mart is the latest company to declare a special one time dividend, $1 per share to be paid on christmas eve. that is helping stock. this is part of a larger tax revolt. companies want to give money to their shareholders before the higher tax rate sticks in. they're sticking it to the treasury. they want to help shareholders, not the treasury. the judge on that in a moment.

stuart: the worst kept secret in media is the official, jeff zucker of nbc universal has been named president of cnn world wide. lindsay lohan was arrested this morning in new york city after allegedly hitting another woman in a light club. use charged with third degree assault, misdemeanor. this is the latest in a long string of run ins with the law. the judge is here. he may or may not wish to comment on lindsay lohan. i will give him the opportunity. he may turn it down. judge napolitano: innocent until proven guilty. i would entering four years. stuart: that is it. now i give a real reason the judge is here. i am calling it a tax revolt.

companies are paying big dividends to save on possible tax hits if they were paid later. 173 companies now pay a special 1 off dividends this year to beat the expected tax increase on dividends that could be coming next year. disney increasing its dividend paying this year, $1.3 billion, that is the payout. las vegas paying out $2 billion, a special one of shot. maybe the biggest of these is costco, free billion dollars, a huge payout. shareholders will a save as much as $700 billion in taxes on that costco pay out. judge andrew napolitano is here and i'm going to give you the full title of his book. how to -- two american presidents destroyed constitutional freedom. judge napolitano: you love saying that. the word destroyed. stuart: i am saying companies

are telling the treasury stick it. we are not going to give you the extra money. we are going to give it to our guys. judge napolitano: it is a tax revolt. on the one hand it is good that people still have the freedom to do this and basically structure economic relationships in order to avoid taxation, tax evasion is a crime. tax avoidance is perfectly acceptable and even encouraged by the tax code. no one should be surprised by this. there was a time in great britain that marginal tax was 91% and a lot of people fled. look at what is happening in and france were the marginal rate is 75%. the government cannot defy human nature. people will do what is rational in order to preserve their assets. don't want to get into taxation is theft argument but at some point it gets so high that it is like that and that another point it is so uncertain, no one knows

to saying at the end of november what the tax rate will be on january 15th, large corporations and even individuals need a plan. stuart: let me raise this one. in november of this year in california they voted for higher tax rates, put up the income tax rate in california, made it retroactive to jan. first. that is a way of not allowing people to adjust their economic behavior to take account of higher tax rates. make it retroactive. judge napolitano: you probably remember this, the first year of clinton's presidency a tie vote resolved by vice president gore to break a tie to raise income taxes retroactively. all kinds of lawsuits filed. can't do that retroactively. can't change criminal law retroactively but you can impose taxes. now the state of picking up on it. stuart: these companies are paying out these special

dividends before the end of the year. is it possible for the feds to turn around and say we are going to make the tax increase on dividends retroactive to last year. judge napolitano: only by an act of congress and can't imagine a house of representatives going on with it unless republicans and house cave on everything. stuart: reach back to a previous calendar year -- judge napolitano: only by congressional -- stuart: not going to happen. judge napolitano: politically it won't happen but if it did i am sorry to inform you the courts would uphold. stuart: we said it here on "varney and company". judge napolitano: by definition, don't have to tell me what it is. stuart: go. judge napolitano: very good. stuart: i think there is going to be a tax increase. this is the deal on the fiscal cliff. tax increase now, delay spending cuts, don't worry about the debt. judge napolitano: i wrote a piece this morning on the washington times and a number of venues. argues the republicans probably

will cave. notwithstanding the pledge they took, just a political pledge, not legally -- i don't want them to raise taxes but they will. they should remember the peril of recent history. the last american president who said who could forget this? read my lips, no new taxes was dispatched by the voters to a hotel room in houston rather than four more years in the white house because he violated that pledge. george herbert walker bush would keep that pledge today. stuart: always a pleasure. we say it every day on "varney and company," time is money. we mean it. i especially mean it. my take on punctuality next. twins. i didn't see them coming. i have obligations. cute obligations, but obligatio. i need to rethink the core of my portfolio.

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>> 4-year-old comes over and stays overnight and when he goes to the equipment he slams the.it see down. i went and bought a quiet see that you just push it and it goes down by itself. stuart: you have got to be kidding me. david bowie in the last hour talking about his first purchase after winning $1 million in a lottery. here is what you've said you would buy first. all these comments on the

facebook page. cheri says i would buy a commercial on fox business telling stuart varney he was wrong about playing the lottery being a waste of. mike says i would need the whole toilet, not just the seat. this from -- i would leave the u.s.. you already paid the tax. why pay after -- there's a clear divide among american men voters and it has to do with race. the wall street journal's dan henning beer's latest column deals with this issue. you may be surprised what he has to say about this and what the gop needs to do next time around. you will join the company at 10:35. do not keep me waiting ever. here's my take on punctuality. in television you must not be late no matter what.

show up even ten seconds late and you are in deep trouble. that absolute principle of punctuality should be translated into everyday life. they have a thing about this? i do. the other day i agreed to meet someone at a new york city landmark at 12:00 noon. to me that means 12:00 noon, not 12:0 one and not 12:10 when this person showed up running late, he said with a smile. i am not buying it and i don't accept it. being late is flat out rude. it also makes the implicit assumption that their time is more valuable than mine and that is absolutely wrong. more than that our you supposed to organize your time if people can't keep time? what does 12:00 noon mean? does it mean 12:00 noon or 12:10 or what? how am i supposed to know? are we all supposed to build in a few minutes of lag time because running late is okay? as i said i am not buying it and i won't have it. punctuality is a virtue.

i would like to see punctuality make a come back and buy will do my part in enforcing punctuality. if that person who kept me waiting ten minutes in the rain, you on notice. in the unlikely event that i agree to meet you ever again, if you are not there at precisely 12:00 noon, i leave. ♪

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stuart: this is a forecast "varney and company" may get right. the obama team wants tax hikes now, promises of entitlement reform later and we just ignore the debt. that is the fiscal cliff deal that may be shaping up. it looks like the fiscal deal of the day. joining us now is tres knippa and i want to know from you, do you think we got this right? that the kind of deal you think may emerge? >> that is the kind of deal that may emerge but let's remember something here. what we need to have we need to have the deadline be tomorrow because people's behavior is motivated by incentives. how do you incentivize a politician? how do you disincentive buys them? if the politicians in washington right now make a deal today they are going to be viewed as selling out their constituents. what they have to do is they

have to do lot of grandstanding, we tried so hard so they're going to take it to the eleventh hour, fifty-nine minutes at the very end and say we had to capitulate on this area or that area because they don't want to appear that they caved in too early so we just have to play this waiting game and we have to have more press conferences and emergency meetings at the white house. make the deadline tomorrow and get it over with. stuart: when you think the deal will be done? >> i am inclined to think so but you and are not going to hear anything right now because politicians have a disincentive to compromise now. they will compromise later at the last possible moment. stuart: we are on record. i say tax now, promise to cut leader, ignore the debt. that is the deal i think we will get. are you broadly in agreement with that? >> definitely have to ignore the debt. as long as the fed act as a backstop to the bond market the bond market should be punishing our politicians right now and

the bond market is not doing it because the fed is a backstop. stuart: they keep on printing. good stuff as usual. thank you very much indeed. how much did race factor into the presidential election? wall street journal's dan henning beer wrote about it today and here's what he had to say. the gop should tell prospective voters their success in the u.s. will depend less on celebrating their assigned category than on supporting political policies that expand economic opportunity. >> it was not the election perce but the analysis after the election. the first thing within days that was said about the republican party was said over and over again, the republicans are too white. the assertion was made without explanation what they meant by

too white. i think it was a comment coming out of this context of realizing everything including exit polls. the most interesting exit polls come ask voters to solve identify if they are white, black, hispanic, asian or other, the same way high school seniors going to college are asked on replication to identify themselves so they can go into a diversity pull. this is the way the culture things about people in america, that you all belong to a category. these categories are elevated and the republican party has to think of a way to appeal to these discrete categories of americans which i personally think is a very destructive way. as i put it at the top of my article martin luther king in 1963 i look forward to the day when people are not judged by the color of their skin but by the content of their character. we have gone absolutely the opposite direction. stuart: so the republicans according to your theory should say we are the party of economic

opportunity for all, all embrace it no matter what, promote policies that create growth which grows everybody. >> i am saying that and i am saying they should try to explain to all americans that that is the path to the american dream which is the middle class and that has normally been called the american melting pot but the left literally called the melting pot a myth, there's no such thing as a melting pot, it is america of all these discrete personalities and ethnicities and racial groupings and that is what they should appeal to. the republicans will never be able to compete with that. stuart: not a healthy america. i don't see that as the kind of america i came to 40 years ago. charles: in some parts i agree with dan and in some parts your complete the offer. talking about how white republicans were before the election. i don't know how much you listen to black radio but the convention was skewered, just crushed. i said the day after the election i am not going to vote

for you if i don't think you like me, i don't care how great your economic policy is and this thing about the great melting pot, my mother scrub floors for 30 years and never made a nickel. how can i succeed in a society where i walk into these halls myself and all i see is pictures of white people? how can a black person succeed? you have to explain that to them but you can't do it in a generalized way. you have to explain policies you embraced, hasn't moved you up the ladder. >> in your case, the problem with the republican party is, they have said some of this but not well enough to create opportunities for black americans to get better jobs than they have now and we will get into something different, so many inner-city black kids were not attending absolutely failed public schools -- [talking over each other] charles: charter schools are amazing. the president is not a fan of charter schools because he is backed by the unions.

what a lot of people don't realize, blacks -- for my thanksgiving i had 17 people over, half were puerto ricans, mexican, i was the only one who voted for romney. the only one in the room. i got to tell you something, they sold the idea that republicans, more black people voted for obama because they were afraid of romney. not because they loved obama but they were so fearful of romney and republicans. >> i think it is a case of actions speaking louder than words. you can say to people we like you and we are inclusive but if you don't have representatives there that look like me or have been in my shoes i am not going to believe it. doesn't matter if you are a person of color, if you're a woman or a person of a certain economic background you need that representation and you need those people to say i am a representative -- didn't have enough of those -- >> at some point it becomes

pandering if you are just rolling out one black or hispanic -- [talking over each other] charles: you have to start the republicans started two weeks ago, got to the grass roots. you can't just show up. you have to be prepared. i don't think a blanket message is going to work. you have to go to these communities and take a lot of heat, a lot of heat. stuart: if whatever community you are talking about, and they think at the moment if my representative doesn't look like me, you don't represent me, you don't represent my interests. isn't that what people think? we are rationalized? charles: a white democrat would have gotten 90% of the black vote, 65% of the hispanic vote. it is also party lines as well. stuart: last word to dan. >> black conservatives who join the republican party typically have been ostracized by polite society and not given the time of day.

someone like alan west or condoleezza rice. condoleezza rice was secretary of state. was she celebrated in the media? not all. had she been a democrat she would have been elevated. stuart: excellent discussion, thanks very much. president obama wins a second term, gun sales go through the roof. are people really that worried about the second amendment being taken away or abused in some way? what exactly is an assault weapon? frequent guest "varney and company"'s nra executive vice president wayne lapierre will be with us after this break. can i help you?

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save on ground shipping at fedex office. stuart: we are sticking with a modest gain for stock prices, dow jones industrials up 30 one points above 13,000, lot of economic news today, third quarter gdp up 2.7% on an annualized basis better than the previous rating, not strong enough, jobless claims 393,000 in the latest and freddie mac, the 30-year fixed-rate mortgage 3.32%. cold the department store down 5%. analysts expect sales to go up, not good for the stock, down 8%. tiffanies lower, weak sales especially in asia. two retailers falling because of weak sales. back in 90 seconds with wayne lapierre of the nra who said of president obama got elected to a

second term he would curb gun rights. people listened. gun sales records broken. veour . joe doesn't know it yet, but he'll wk his y up from busser to waiter to chef before opening a restaurant specializing in fish and me from the great northwest. he'll start investing early, he'll find some good people to help guide him, nd he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade.

stuart: the team clothing retailer aerospatiale is down. nicole: when they come out with their earnings and sales have been decent but it is the al look that has been disappointing so as a result we are seeing them to the down side. where we saw american eagle and abercrombie and fitch and other

teen retailers doing better overall and giving out books that were better, and aerospatiale is getting pummeled down 7%. stuart: thank you. as we all know sales of guns have been booming this year, they really boom on black friday. the fbi field 154,000 background checks from gun dealers for prospective buyers. 62% of those applications were for so-called long guns, some of which are called assault weapons. i asked oliver north yesterday what exactly is an assault weapon? listen to this. >> that is in this book because that is what people are afraid of. they are afraid of a ban on so-called assault weapons that are simply semi-automatic firearms that look a certain way, something clinton tried to and had to go back on. stuart: semiautomatic weapons that look a certain way. wayne lapierre is executive vice president of the and are a. good to have you back.

i am not sure i exactly understand what is an assault weapon as defined by the gun control people. can you tell me? >> i will tell you what it is, and invented term by people who hate the second amendment to confuse the american public. the military uses assault and a lot of ways, assault tactical teams, assault tactics, all this, the anti-gun movement simply borrow deter assault rifle and put it on civilian firearms. none of what they say in terms of civilian firearms in relation to that term is true. stuart: if i had a long gun with a clip that shoots more than five bullets is that an assault weapon? what makes the long gun and assault weapon? >> it is an anti-gun invented term. they say these firearms which are civilian firearms raid. , weapons of war like our

soldiers use, not true, more powerful, not true, heavy armor, not true, virtually everything you hear the media and the antigun movement that politicians like dianne feinstein and president obama say about this stuff is simply not true. if they're doing it deliberately it is a lie. that is where the breakdown occurs. gun owners, they know the truth, they may be a victim of these lies but they know better and are extremely frustrated by the politicians and the media that ought to do -- no better to do it intentionally or because they are part of a media machine that hates the second amendment and try to take away freedom of americans. stuart: yesterday coke reynolds was on the show. the was the man who banned obama supporters from his gun store and he said president obama is the genius and he played on the second amendment perfectly. listen to this for a second. >> he is a genius.

he has been very disciplined and patient and has waited until his second term and many of us very much believe that he is going to implement more than just an assault weapons ban. all i have to say to these people is wait and see. stuart: i think you would agree with that. wait and see. you think i believe that president obama will go after the second amendment and that is why we had 154,000 background checks in one day alone, black friday. >> president obama tried to fog the issue, sent out literature saying he was a strong supporter of the second amendment. none of that is true. the day after the election he said he would sign the u.n. treaty, the day after the election they started talking about their antigun agenda. i expect a full seat on the second amendment and the only way we will withstand this is to make the and are a stronger dan ever. we will face an unprecedented blizzard of assault.

is going to come hard and fast and soon and never before, if you are freedom loving american, has so much been at the edge of oppressive as. stuart: we hear you, wayne lapierre. excellent commercial for the nra. thank you very much. [talking over each other] stuart: we will see you again soon. jets fans paid the most for tickets for their arguably the worst team in the nfl. some say simply horrible. now the fans are letting them know and it is getting nasty. that will be next. now we need a little t more... [ male announcer ] at humana, we understand the value of quity time and personal attention. which is why we are proud to partner with health care professionals who understand the difference that quality time with our members can make... that's a very nice cake! ohh! [ giggles ] [ male announcer ] humana thanks the physicians, nurses, hospitals, pharmacists and other health professionals who helped us achieve the highest average star rating

among national medicare companies... and become the first and only national medicare advantage company to achieve a 5-star rating for a medicare plan... your efforts result in the quality of care and service we're able to provide... which means better health outcomes... and more quality time to share with the ones who matter most. i love you, grandma! [ male announcer ] humana. ♪

stuart: the new york jets are terrible. that is what everyone in new york has been talking about since their embarrassing performance thanksgiving night. listen to this verbal harassment from fans. [shouting] stuart: and that was some of the nicest stop. those people paid hundreds of dollars and left their families and brian costello of the new york post says those fans should stop going to the games. he says, quote, jets fans deserve a refund after watching their 4-7 season stumble and

fumbled their way out of playoff contention. if the jets were at stake you would send it back. carol roth from chicago what these a? >> absolutely. it has to start with the fans. the fans don't recall the end up with the cubs to everybody loves and haven't won conover 100 years. a dozen start with the fans, meet mediocrity becomes acceptable. stuart: those fans are paying for non premium seats, they can average of $174 for a ticket. >> all want to do is see tim tebow. given what they want to. he is in running back -- charles: they will give him a lot of play this weekend but you same mediocrity, they won in 69. it is a pretty long string mediocrity. [talking over each other] >> fans keep paying out they will not give them a winning team. stuart: someone has to have a losing season.

charles: can we win one a decade? >> you want to be the cleveland browns? stuart: i have no idea what you are talking about. should they play tim tebow? charles: absolutely. stuart: more "varney and company" after this.

stuart: i love this highlight reels the road. >> but at the winter solstice on andrew cuomo's door -- >> don't, what i think. what i said i didn't have a problem i don't have a problem. stuart: when you have a thing about atheist. before their brilliant because what they try to do with it different religions against each other. no nativity scene because you are offending muslims when in fact they hate all religions and americans better be careful about this. >> take santa claus out of the mall? ridiculous. stuart: one atheist objects and everyone else has to change to accommodate them. a great show. i thank you, carol and charles for showing up on time, being nc